**CONTRACT****FOR PURCHASE AND SALE OF EQUIPMENT AND SERVICES**

 

This **Contract For Purchase And Sale Of Equipment And Services**(the***“Contract”***) is madeand entered into as of February 11, 2002 (the ***“Effective Date”***) by and between **The Titan Corporation**, a Delaware corporation (the***“Buyer”***), and **SureBeam Corporation**, a Delaware corporation (the ***“Seller”***).

**RECITALS**:

 

A.            Seller is engaged in the business ofdesigning, manufacturing, selling, installing, operating and servicing foodirradiation or pasteurization systems, including electron beam and x-rayequipment and systems.

B.            Buyer’s Affiliate, Titan ScanTechnologies Corporation is engaged in the business of selling, operating andservicing medical equipment sterilization systems and providing medicalequipment sterilization services (the ***“Titan Scan Business”***).

C.            Buyer is engaged in the business ofselling, operating and servicing systems for irradiating mail to kill anthraxand other biological agents for the United States Postal Service and for othercustomers (the ***“Mail Business”***).

D.            Buyer either directly or through oneor more Affiliates may establish one or more other businesses that use electronbeam and x-ray equipment and systems in applications other than treatment offood, flowers or animal hides (the ***“Other Businesses”***).

E.             Buyer or its Affiliates have agreedto purchase from Seller, and Seller has agreed to sell to Buyer or itsAffiliates, linear accelerator equipment and related equipment, materialhandling equipment, safety equipment, dosimetry system, and a real-timeinformation and control systems as more particularly described on **Exhibit A**hereto configured as specified in each Statement of Work, as such equipment andsystems may be improved or enhanced by Seller from time to time, includingthrough the introduction of new models, (collectively, ***“Systems”***) and specified services to be usedby Buyer or its Affiliates in connection with the Titan Scan Business, MailBusiness or Other Businesses on the terms and conditions contained in thisContract.

NOW, THEREFORE, inconsideration of the foregoing recitals, which .are hereby incorporated byreference herein, the covenants and conditions contained herein and other goodand valuable consideration, the receipt and sufficiency of which is herebyacknowledged, the parties agree as follows:

**1.            **Definitions

As used herein, thefollowing terms shall have the following meanings:

**(a)           *“Affiliate”*** means any entity that directly orindirectly Owns, is Owned by or is under common Ownership, with a party to thisContract, where “Owns” or “Ownership” means direct or indirect possession of atleast fifty percent of the outstanding voting securities of a corporation or acomparable equity interest in any other type of entity; provided, however, that

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Affiliates shall onlyinclude those entities that have expressly accepted this Contract and that haveagreed to be bound by all terms and conditions of this Contract.  Seller shall not be required to sell Systemsor Integration Services to any Affiliate of Buyer that does not manifest suchacceptance of all obligations applicable to Buyer in a writing reasonablysatisfactory to Seller.

**(b)           *“ChangeOrder”***shall have the meaning ascribed to it in Section 2(d).

**(c)           *“Changes”*** shall have the meaning ascribed to it inSection 2(d).

**(d)           *“Confidentialand Proprietary Information”*** means confidential information of a party relating toany designs, know-how, inventions, technical data, ideas, uses, processes,methods, formulae, research and development activities, work in process, or anyscientific, engineering, manufacturing, marketing, business plan, financial orpersonnel matter relating to the disclosing party, its present or futureproducts, sales, suppliers, customers, employees, investors or business,whether in oral, written, graphic or electronic form (which is markedconfidential or acknowledged as being confidential prior to disclosure).  If the Confidential and ProprietaryInformation is disclosed orally or visually, it shall be identified as such atthe time of disclosure and confirmed in writing by the disclosing party withinthirty (30) days of disclosure. Confidential and Proprietary Information shall also include any otherinformation in oral, written, graphic or electronic form which, given thecircumstances surrounding such disclosure, would be considered confidential.

**(e)           *“Cost ofServices”***means Seller’s actual direct cost of providing Services under this Contract orany Statement of Work as determined under GAAP, *plus* Seller’s direct cost ofcomplying with Buyer’s compliance standards as set forth in Section 10 belowthat are applicable to the particular Service, *plus* Seller’s InsuranceCosts (as defined in Section 14) allocated for each Statement of Work betweenCost of Services and Cost of Manufacturing based upon the relative direct costincurred for each such Statement of Work and allocated among Statements of Workon a monthly basis in proportion to total direct costs on all projects for suchmonth, *plus*(i) in the case of Services related specifically to medical sterilizationequipment, an allocation of Seller’s general and administrative expenses (otherthan selling, marketing, accounting, finance, or advertising expenses orexpenses of the office of the chief executive officer of Seller) directlyattributable to performing such Services under this Contract or any Statementof Work, as determined under GAAP, or (ii) in the case of Services relatedspecifically to all Systems other than medical sterilization equipment, anallocation of Seller’s general and administrative expenses (other than selling,marketing, or advertising expenses or expenses of the office of the chiefexecutive officer of Seller) directly attributable to performing such Servicesunder this Contract or any Statement of Work, as determined under GAAP. In noevent shall any item of Seller’s cost be counted more than once in determiningSeller’s Cost of Services.

**(f)            *“DeliveryLocation”***shall have the meaning ascribed to it in Section 4(a).

**(g)           *“Design Services”*** shall have the meaning ascribed to it inSection 2(a)(iv).

**(h)           *“ExclusiveIntegration Services Period”*** shall have the meaning ascribed to it in Section2(a)(iii).

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**(i)            *“ExclusiveSystem Period”*** shall have the meaning ascribed to it in Section 2(a)(i).

**(j)            *“ForceMajeure”***means storms, floods, earthquakes, acts of God, acts of civil or militaryauthority, quarantine restrictions, riots, fires, lock-outs, commercialimpossibility, explosions and bombings, acts of war and terrorism or any othercause or causes beyond the reasonable control of the party seeking to beexcused from performance.

**(k)           *“GAAP”*** shall mean U.S. generally acceptedaccounting principles.

**(l)            *“InspectionPeriod”***shall have the meaning ascribed to it in Section 5(e).

**(m)          *“IntellectualProperty Rights”*** means any now known or hereafter existing (a) rightsassociated with works of authorship throughout the universe, includingexclusive exploitation rights, copyrights, moral rights and mask works, (b)trademark and trade name rights and similar rights, (c) trade secret rights,(d) patents, designs, algorithms and other industrial property rights, (e)other intellectual and industrial property and proprietary rights of every kindand nature throughout the universe, whether arising by operation of law, bycontract or license, or otherwise, and (f) all registrations, applications,renewals, extensions, combinations, divisions or reissues of the foregoing.

**(n)           *“IntegrationServices”***means the integration and installation services together with Service Levelsspecified on ***Exhibit B***hereto together with such additional installation services that are specifiedin a separate Statement of Work.

**(o)           *“LicenseAgreement”*** means the Amended and Restated License Agreement effective as ofOctober 17, 2001, between SB OperatingCo., Inc. and The Titan Corporation.

**(p)           *“LimitedWarranty”***shall have the meaning ascribed to it in Section 8(a).

**(q)           *“MailBusiness”***shall have the meaning ascribed to it in Recital C.

**(r)           *“Maintenanceand Support Services”*** means those maintenance and support services togetherwith Service Levels specified on ***Exhibit C*** hereto together with such additionalmaintenance and support services that are specified in a separate Statement of Work.

**(s)           *“ManufacturingCost”***means Seller’s actual direct cost of manufacturing and assembling the Systems,for Buyer or its Affiliate, including parts and labor determined under GAAP,plus Seller’s direct cost of complying with Buyer’s compliance standards as setforth in Section 10 below that are applicable to the particular System, *plus*Seller’s Insurance Costs (as defined in Section 14) allocated for eachStatement of Work between Cost of Services and Cost of Manufacturing based uponthe relative direct cost incurred for each within such Statement of Work andallocated among Statements of Work on a monthly basis in proportion to therelative total direct costs on all projects for such month *plus* Buyer’s allocated shareof Seller’s overhead costs for its manufacturing facility (excluding any costof complying with Buyer’s compliance standards as set forth in Section 10 orInsurance Costs), allocated based on the ratio of the total systems beingproduced for the Buyer Statement of Work to the total of all systems beingproduced by the Seller for the Buyer Statement of Work period.  Notwithstanding the above,

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unless otherwise agreedin given Statement of Work, the overhead allocated to Buyer for all systemsunder Statements of Work in 2002, are to bear a direct relationship to theproportion of the estimated number of systems to be produced for the Buyerunder all Statements of Work in 2002 to the total 17 budgeted units to beproduced by Seller for all customers in 2002, in such facility, plus (i) in thecase of medical sterilization Systems, an allocation of Seller’s general andadministrative expenses (other than selling, marketing, accounting, finance, oradvertising expenses or expenses of the office of the chief executive officerof Seller) directly attributable to manufacturing and assembling the Systems,as determined under GAAP, or (ii) in the case of all Systems other than medicalsterilization Systems, an allocation of Seller’s general and administrativeexpenses (other than selling, marketing, or advertising expenses or expenses ofthe office of the chief executive officer of Seller) directly attributable tomanufacturing and assembling the Systems, as determined under GAAP.  In no event shall any item of Seller’s costbe counted more than once in determining Seller’s Manufacturing Cost.

**(t)            *“MilestoneSchedule”***means the production, delivery and payment schedule for the System or Servicesas set forth in the applicable Statement of Work.

**(u)           *“Other Businesses”*** shall have the meaning ascribed to it inRecital D.

**(v)            *“PurchasePrice”***shall have the meaning ascribed to it in Section 3.

**(w)           *“Services”*** means collectively, the Maintenance andSupport Services, the Integration Services and the Design Services orindividually, as context requires, any one of such services required under anyStatement of Work.

**(x)           *“Specifications”*** shall have the meaning ascribed to it inSection 2(b).

**(y)           *“Statementof Work”***shall have the meaning ascribed to it in Section 2(b).

**(z)           *“SystemDocumentation”*** shall have the meaning ascribed to it in Section 2(c).

**(aa)         *“Systems”*** shall have the meaning ascribed to it inRecital E.

**(bb)         *“Term”*** shall have the meaning ascribed to it inSection 6.

**(cc)         *“Titan ScanBusiness”***shall have the meaning ascribed to it in Recital B.

**(dd)         *“WarrantyPeriod”***shall have the meaning ascribed to it in Section 8(a).

**2.             Systemspurchased and documentation provided**

**(a)           ExclusiveSupply**.

(i)            For the period beginning with theEffective Date and ending on December 31, 2003 (the ***“Exclusive System Period”***), Buyer shallpurchase all of Buyer’s and its Affiliates’ requirements for new Systems(excluding electron beam or x ray accelerators with power of 150 kilowatts ormore) from Seller, and Seller shall supply all of Buyer or its Affiliates’requirements for such systems, unless Seller either (A) approves in writing aspecific purchase of Systems by 

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Buyer from a third party,or (B) provides written notice to Buyer that (y) it is unable to supply aSystem or Systems within the delivery window specified by Buyer or itsAffiliate’s applicable Statement of Work so long as the specified deliverywindow is within Seller’s published lead times for its customers, or (z) itwill be unable to comply with the Specifications in any prospective Statementof Work, in any of which case Buyer shall be free to purchase such specificSystem only, subject of Seller’s written notice under this clause (B), from athird party or manufacture the System for itself.  Any notice from Seller under Clause (B) hereof shall not affectthe continuing obligation of Buyer to purchase all of Buyer’s and itsAffiliates’ requirements for new Systems from Seller during the remainder ofthe Exclusive System Period other than any Systems covered by such notice.

(ii)           During the Exclusive System Period,Buyer shall only purchase Maintenance and Support Services for Buyer’s and itsAffiliates’ Systems, including spare parts, from Seller, unless Seller either(A) approves in writing a specific purchase of specific maintenance and supportservices by Buyer from a third party, or (B) provides written notice to Buyerthat it is unable to supply Maintenance and Support Services to Buyer, in whichcase Buyer shall be free to purchase such specific Maintenance and SupportServices only, subject of Seller’s written notice under this clause (B),  from a third party.  Any notice from Seller under Clause (B)hereof shall not affect the continuing obligation of Buyer to purchase all ofBuyer’s and its Affiliates’ requirements for Maintenance and Support Servicesfor the remainder of the Exclusive System Period other than the Maintenance andSupport Services covered by such notice.

(iii)          For the period beginning with the EffectiveDate and ending on December 31, 2002 (the ***“Exclusive Integration Services Period”***), Buyer shallonly purchase Integration Services from Seller, unless Seller either (A)approves in writing a specific purchase of Integration Services by Buyer from athird party, (B) provides written notice to Buyer that (y) it is unable tosupply a specific Integration Service within the delivery deadlines specifiedby Buyer or its Affiliate’s applicable Statement of Work, or (z) it will beunable to comply with the Specifications in any prospective Statement of Workapplicable to the Integration Service, in any of which case Buyer shall be freeto purchase such specific Integration Service only, subject of Seller’s writtennotice under this clause (B), from a third party.  Any notice from Seller under Clause (B) hereof shall not affectthe continuing obligation of Buyer to purchase all of Buyer’s and itsAffiliates’ requirements for Integration Services from Seller during the remainderof the Exclusive Integration Services Period other than the IntegrationServices covered by such notice.

(iv)          To the extent requested by Buyer or anAffiliate and agreed by Seller, Seller shall provide to Buyer or its Affiliatesystem engineering, proposal perparation, sales support, professional designand engineering services or other services as requested by Buyer or anAffiliate in connection with proposal presentation and sales, site analysis andSystem specification as well as system engineering modifying and configuringthe Systems or any components of the Systems, including, without limitation,the information and control system as necessary to use the System for itsintended application or to otherwise comply with the specifications of acustomer of Buyer or its Affiliates (***“Design Services”***). Seller shall perform Design Services professionally and in accordancewith established business standards and ethics.  All Design Services shall conform to the specifications andperformance standards set forth in the Statement of Work.

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(v)            Buyer and its Affiliates shall haveno obligation to generate any requirements for Systems or Services or otherwisemarket the Systems.

**(b)           Systemsand Statements of Work**.   Subject to Section 1(a) above,and upon the terms and subject to the conditions set forth in this Contract andin statements of work to be subsequently agreed upon in writing by both partieshereto (each, a ***“Statement of Work”***),Seller shall sell Systems and provide Maintenance and Support Services andIntegration Services to Buyer or its Affiliates, and Buyer or its Affiliatesshall purchase Systems, Maintenance and Support Services and IntegrationServices from Seller, for the Purchase Prices specified in Section 3below. Each purchase transaction shall be set forth in a separate Statement ofWork.  Once a given Statement of Workhas been fully executed by the parties, it shall be incorporated into andgoverned by the terms and conditions of this Contract.  Each Statement of Work shall set forth at aminimum (i) design specifications and feature sets for the System beingsupplied, including the configuration of the System, (the ***“Specifications”***), (ii) scope of the Servicesbeing provided, if any, (iii) a Milestone Schedule for the System and/orServices being provided; (iv) the Purchase Prices for the specified Systems andServices and Milestone Schedule payment schedule; and (v) in the case of aStatement of Work executed by an Affiliate of Buyer, a statement, reasonablysatisfactory to Seller, that such Affiliate expressly accepts this Contract andagrees to be bound  by all terms andconditions herein applicable to Buyer.

**(c)           SystemDocumentation**.  In connection with each System sold toBuyer, Seller shall also provide to Buyer the written or electronic materialspublished or otherwise made available by Seller with respect to the System,including without limitation, recommended spare parts lists, service andmaintenance schedules, as-built drawings and schematics and such operations,training, service and repair manuals, including user manuals for the monitoringand control systems, as may be necessary or convenient to operate such System(collectively, the ***“System Documentation”***).

**(d)           ChangeOrders**.  No additions, changes or modifications toany of Statement of Work by either party (each ***“Changes”***) will be considered by the otherparty unless such proposed Changes are first submitted in writing to the otherparty and shall not have an effect until a Change Order (as defined below) is executedby both parties.  The partiesacknowledge and agree that any Changes may affect or delay the delivery and/orthe Purchase Price for the products or services set forth therein.  Promptly after a requested Change has beensubmitted for approval to Seller, or to Buyer (if Seller requests a Change),Seller shall prepare and deliver to Buyer an estimate of the anticipatedimpact, if any, on the delivery schedule and/or the Purchase Price.  After Buyer has received such information,Buyer shall indicate in writing whether it approves such Changes.  Thereafter, the parties shall mutuallyrevise the applicable Statement of Work upon mutual execution of a writtenorder detailing the Changes to be made (each, a ***“Change Order”***).  Seller shall not be obligated to implement any Changes specifiedin a Change Order until Buyer has executed and returned such Change Order toBuyer.  Each Change Order shall state(i) a detailed description of the Change to the System(s) or services to beprovided under the Statement of Work, (ii) the amount of the fixed adjustmentto the fixed Purchase Price or estimated change to any cost plus PurchasePrice, if any, due to increases in Manufacturing Cost or Cost of Services, and(iii) the extent of the adjustment, if any, in the delivery schedule.  For all purposes under this Contract, eachChange Order will be fully incorporated into the 

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Statement of Work towhich such Change Order applies.  Sellershall not be liable for any delays that occur in the delivery schedule due toChanges requested by Buyer.

**3.             Purchase Price**

This purchase price to bepaid by Buyer to Seller for each System and Services, if applicable, (the ***“Purchase Price”***)shall be a fixed price specified below payable as follows:

**(a)           Systems**. The Purchase Price for Systems and all spare parts shall be F.O.B.Delivery Location and shall equal Seller’s estimated Manufacturing Cost formanufacturing such System plus a markup of twenty percent (20%), unless theparties negotiate a different pricing approach as reflected in the applicableStatement of Work.  The parties’ shallnegotiate in good faith a fixed Purchase Price for each System based upon theestimated Manufacturing Cost for such System for each Statement of Work priorto commencement of construction of any System under such Statement of Work andshall specify the fixed Purchase Price in the Statement of Work.

**(b)           Services**. Seller shall supply all Services for Seller’s Cost of Services plus amarkup of twenty percent (20%) unless the parties negotiate a different pricingapproach as reflected in the applicable Statement of Work. Notwithstanding theprevious sentence, Buyer may engage Seller, from time to time, to performspecified Design Services under an interim Statement of Work in order todevelop the scope of a final Statement of Work.  Buyer shall pay Seller for any Design Services performed under aninterim Statement of Work that does not result in a final Statement of Work atSeller’s Cost of Services****for the Design Services plus a markup oftwenty percent (20%), unless the parties agree to a different pricing approachas reflected in such interim Statement of Work.  If an interim Statement of Work leads to a final Statement ofWork, then the cost of the Design Services shall be included in the Cost ofServices in the applicable Statement of Work. In addition, Buyer or itAffiliate shall reimburse Seller for reasonable out-of-pocket expenses incurredfor travel, food and accommodation in connection with the performance ofIntegration Services, including installation services, at Buyer or itsAffiliate’s customer site outside of San Diego County, California.

**(c)           Taxes**. Buyer will pay all non-U.S. export charges, import duties, any and allsales, use, excise, value added or other taxes or assessments imposed by anygovernmental authority upon or applicable to any sale to Buyer or itsAffiliates of Systems or Services under this Contract (unless Buyer providesSeller with an applicable resale certificate that exempts a sale from suchtaxes), and all costs and charges for transportation, brokerage, handling andinsurance of the System from the point of shipment.

**(d)           Paymentof Purchase Price**.  The Purchase Price for all Systems andServices supplied under this Contract shall be payable in accordance with theMilestone Schedule set forth in the applicable Statement of Work; providedhowever, if a supplier or subcontractor of Seller requires Seller to makeadvance payments or deposits prior to commencing work on parts or componentsfor Systems and Buyer approves of the use of such supplier or subcontractorwith respect to such Statement of Work in its discretion, then Buyer shall makepayments to Seller in the same amount required by the supplier or subcontractorat the time the advance or deposit is required to be made by Seller as anadvance against the Milestone Schedule payments that are

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otherwise payable underthe Statement of Work.  Such advancesshall be applied against the Purchase Price, beginning with the first MilestoneSchedule payment that is payable for each Statement of Work.   Seller shall send Buyer an invoice for eachMilestone Schedule payment, together with a report supporting achievement ofthe applicable milestone covered by the invoice.  Buyer shall pay the full amount of each invoice, in cash in USdollars, on net ten (10) business day terms following Buyer’s acceptance of thedeliverable or milestone associated with such invoice under the applicableMilestone Schedule pursuant to Section 5(a) below.

**(e)           Recordsand Audit**. Sellershall maintain records with respect to Manufacturing Costs, Cost of Servicesand expenses under this Contract during the Term of this Contract and for threeyears following the completion of each Statement of Work unless a longer recordretention period is specified in an applicable Statement of Work.  Such records shall be made available bySeller upon reasonable advance notice during reasonable business hours forexamination at Buyer’s expense by a Buyer’s independent public accountants, forthe sole purpose of verifying for Buyer or its Affiliates the correctness ofcalculations of Manufacturing Costs, Cost of Services, and other expenses orpayments under this Contract, including under any specific Statement ofWork.  In the absence of materialdiscrepancies (defined as discrepancies of in excess of five percent (5%)) inany request for reimbursement resulting from such audit, the accounting expenseshall be paid by Buyer.  If materialdiscrepancies do result, Seller shall bear the accounting expense.  Any records or accounting informationreceived from Seller shall be Confidential and Proprietary Information. Theterms of this Section 3(e) shall survive any termination or expiration ofthis Contract for a period of the three years.

**4.             Deliveryof System**

**(a)           DeliveryLocation**.  If not specified in the applicable Statementof Work, prior to the date Seller has completed the manufacture of each System,Buyer or its Affiliate shall specify to Seller, in writing, the location towhich Seller shall deliver such System (a ***“Delivery Location”***).

**(b)           Packingand Shipping**.  All Systems shall be packed for shipment andstorage in accordance with Seller’s standard commercial practices.  Seller shall ship all Systems, F.O.B.Delivery Location.

**5.             Installationand Acceptance of System**

**(a)           MilestoneAcceptance**.  Seller will manufacture and deliver to Buyerthe System, or in the case of Services, will perform the Services, inaccordance with the dates set forth in the Milestone Schedule and willdemonstrate as a material part of each delivery that the relevant deliverableis complete, and complies with the applicable Statement of Work andSpecifications.  Buyer shall accept eachdeliverable supplied under this Contract that complies with the relevantStatement of Work and the Specifications applicable to such System.  Except with respect to the final milestonewhich shall be governed by Sections 5(e) through (g) inclusive, Buyer shallinspect each deliverable within ten (10) business days of the latter of (i) itsdelivery to the Delivery Location or (ii) the completion of Seller’s Servicesrelating to such deliverable, if applicable (the ***“Milestone Acceptance Period”***).  Seller shall provide Buyer written notice ofits acceptance or rejection within such Milestone Acceptance Period.  Any notice of rejection shall

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specify in reasonabledetail the reasons such deliverable or Services does not [materially] complywith the relevant Statement of Work and the Specifications applicable to suchdeliverable.  If Buyer rejects anydeliverable or Services during a Milestone Acceptance Period, and if Sellerconfirms such non-compliance, then Seller shall, at no additional charge and assoon as reasonably practicable, use commercially reasonable efforts to causethe rejected deliverable or Services to comply with the relevant Statement ofWork and the Specifications or replace the rejected deliverable with a conformingdeliverable.  If Buyer fails to provideSeller with written notice of its acceptance or rejection within the applicableMilestone Acceptance Period, then the deliverable or Services shall be deemedto have been accepted by Buyer on the latter of the tenth (10th) business dayafter the receipt of such deliverable by Buyer, or the completion of Seller’sServices, if applicable.  Uponacceptance of any deliverable or Services under a Milestone Schedule, Buyer shallpay Seller the payment applicable to such deliverable or Services as set forthin the Milestone Schedule pursuant to Section 3(d) above.

**(b)           Installation**. Upon delivery of all deliverables applicable to a System to Buyer at theapplicable Delivery Location, such System shall be installed by Seller ifduring the Exclusive Integration Services Period or may be installed by Sellerif Integration Services are specified in the applicable Statement of Work afterthe Exclusive Integration Services Period. Integration Services, including installation services, and any otherServices provided hereunder shall be performed by Seller solely as anindependent contractor.  Seller shallprovide all necessary supervision, labor, materials, construction equipment andmachinery, tools, utilities and permits necessary for the proper installationof each System. All personnel furnished by Seller to provide such Servicesshall at all times be the employees or independent contractors of Seller orSeller’s subcontractors and shall not be deemed to be the employees or agentsof Buyer or its Affiliates.  Sellershall have sole and exclusive control over its employees and independentcontractors who provide services to Buyer and over policies relating to laborand employee relations, wages, hours and working conditions of itsemployees.  Seller shall have the soleand exclusive right to hire, transfer, suspend, lay-off, recall, promote,assign, discipline, adjust grievances and discharge said employees orcontractors.  Seller shall be solelyresponsible for payment of wages, overtime, benefits, worker’s compensation,sick leave, vacation and other payments or benefits due to said employees orcontractors.

**(c)           ProtectiveMeasures and Safety**.  Without limiting the generality of Section15 of this Contract, each of Seller and Buyer shall be responsible for allinjury or damages to individuals or property that may occur as a result of itsfault or negligence or, in the case of Seller, that as of its subcontractors orsuppliers in connection with the performance of the Services.  Seller shall be responsible for the propercare and protection of all equipment and materials furnished by Buyer, itsAffiliate or its customers to Seller until final acceptance of the Services.  Seller shall take all necessary precautionsfor the safety of Seller’s employees or independent contractors on the job siteand prevent accidents or injury to individuals on, about or adjacent to the jobsite.  In addition, Seller shall erectand properly maintain at all times, as required by the conditions and progressof the Integration Services, all necessary safeguards and warnings for theprotection of Seller’s employees and independent contractors, Buyer or itsAffiliate’s employees or Buyer or its Affiliate’s customer’s employees and thegeneral public.  Seller shall furnish toBuyer copies of all accident reports, promptly upon the occurrence of anyaccident or injury at any job site. Seller agrees to employ labor in accordance with all applicable safetycodes.  Seller shall furnish to Buyercurrent Material Safety Data Sheets for any hazardous

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materials Seller needs touse in connection with any Integration Services prior to delivery of suchhazardous materials to a job site.

**(d)           Clean-up**. At all times during the course of performing the Services, Seller shallperform such Services, including any necessary clean-up of Seller’s materialsand work-in-progress, so as to maintain the job site in a clean, safe andorderly condition.  Upon completion ofthe Services, Seller shall clean all surfaces, fixtures, equipment and otheritems which are part of the Systems that were installed or may have been soiledby Seller, and remove from the job site and legally dispose of all temporarystructures, tools, equipment, machinery and other items that were installed orfabricated by Seller, including all hazardous materials stored and used bySeller.  Buyer shall be entitled to backcharge Seller for any costs of clean-up if Seller fails to clean-up Seller’sportion of the job site within 48 hours after demand by Buyer.

**(e)           Inspection**. Buyer shall inspect each System delivered hereunder within fifteen (15)business days of the latter of (i) the final delivery of all deliverablesapplicable to such System to the applicable Delivery Location, or (ii) thecompletion of Seller’s Integration Services, if applicable (the ***“Inspection Period”***).  Buyer shall accept any System that complieswith the relevant Statement of Work and Specifications applicable to suchSystem. Seller shall provide Buyer written notice of its acceptance orrejection within such Inspection Period. Any notice of rejection shall specify in reasonable detail the reasonssuch System does not comply with the relevant Statement of Work and theSpecifications applicable to such System.

**(f)            Rejection**. If Buyer notifies Seller during the applicable Inspection Period thatany System delivered hereunder is rejected for failure to comply with therelevant Statement of Work and the Specifications applicable to such System,and if Seller confirms such non-compliance, then, Seller shall, at noadditional charge and as soon as reasonably practicable, use commerciallyreasonable efforts to cause the rejected System to comply to the relevantStatement of Work and the Specifications applicable to such System or replacethe rejected System with a conforming System.

**(g)           DeemedAcceptance**.  Except in the event of any investigation,corrective action or retesting of a System under this Section 5, should Buyerfail to provide Seller with written notice of its acceptance or rejectionwithin the applicable Inspection Period, then the System shall be deemed tohave been accepted by Buyer on the fifteenth (15th) business day after thelatter of (i) receipt of such System at the applicable Delivery Location, or(ii) the completion of Seller’s Integration Services, if applicable.

**6.             Term**

The term of this Contract(the ***“Term”***) shallcommence on the Effective Date and terminate on December 31, 2003, unlessterminated earlier in accordance with Section 9 below.   The parties may extend the Term foradditional two-year periods by mutual written agreement.   Such additional two-year periods, shallalso be considered the “Term,” as applicable.

**7.             Titleand Risk of Loss**

**Titleto, and the risk of loss, injury or destruction of any System, from any causewhatsoever shall pass to Buyer upon the delivery of such Systems to theDelivery Location.**

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**8.             Warranties And Remedies**

**(a)           LimitedWarranty.**  Seller warrants that each System sold toBuyer pursuant to this Contract will be free from any material defects indesign, materials and workmanship (***“Limited Warranty”***) for the first to occur of a periodof twelve (12) months from the date of final acceptance of the System by Buyerin accordance with Section 5(e), or fifteen (15) months from the date ofinstallation of the System (the ***“Warranty Period”***). If, during the Warranty Period, Buyer notifies Seller in writing thatthe Limited Warranty is breached with respect to a System, and demonstratesmaterial defect(s) in design, materials and workmanship, and none of theexceptions specified below exist, then Seller shall, at its expense, repair orreplace defective equipment or components and use commercially reasonableefforts to correct any other material defect(s) in designs, materials andworkmanship identified in writing by Buyer. This Limited Warranty shall not apply: (i) if the System has beenmodified, changed or altered by anyone other than Seller; (ii) if the System isimproperly installed and Seller did not provide the installation services,(iii) if the System is being improperly operated and/or used in any way otherthan as contemplated by its Specifications or the applicable Statement of Work;or (iv) if the damage or defect is caused by fire, flood, wind, lightning orsimilar occurrences.  If any of Buyer’swarranty claims fall within any of the above exceptions, then the LimitedWarranty shall become immediately null and void and shall be of no furtherforce or effect with respect to such System and Buyer shall pay Seller’s costsof investigating and identifying the problem, and Seller’s expenses to repairor correct the problem, based on Seller’s then-current charges.

**(b)           LimitedPerformance Warranty.**  Seller further warrants thatas of the latter of (i) the delivery of a System to Buyer at the applicableDelivery Location, or (ii) the completion of Seller’s Integration Services, ifapplicable, and for the duration of the Inspection Period applicable to suchSystem, each such System supplied hereunder shall materially comply therelevant Statement of Work and the Specifications applicable to such System andwill perform and operate substantially in accordance with the Specificationsapplicable to such System and the performance criteria set forth in Buyer’sapplicable Statement of Work.  If,during the Inspection Period, any System does not comply with the relevantStatement of Work and the Specifications applicable to such System or does notperform or operate substantially in accordance with the Specificationsapplicable to such System and performance criteria in the relevant Statement ofWork, then Seller shall, at its expense, repair or replace nonconformingcomponents of the System and shall use commercially reasonable efforts tocorrect any other defects in the System.

**(c)           Compliancewith Law.**  Seller further warrants, providedinstallation of a System is performed by Seller, that as of the completion ofSeller’s Integration Services with respect to such System, such System willsubstantially conform in all material respects to the then-in-effectrequirements of any federal, state or local governmental rule, regulation orstandard governing the operation or use of such System on such date.

**(d)           ServicesWarranty. ** Seller warrants that the Services will be performed only bypersonnel who are trained and qualified to perform such Services and that allServices shall be performed professionally and in compliance with the specificationsand performance standards set forth in the applicable Statement of Work.

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**(e)          **THE ABOVE WARRANTIES ARE IN LIEU OF ALLOTHER EXPRESS OR IMPLIED WARRANTIES, EXPRESS OR IMPLIED, AND SELLERSPECIFICALLY DISCLAIMS ALL SUCH OTHER EXPRESS OR IMPLIED WARRANTIES AND/ORAGREEMENTS INCLUDING BUT NOT LIMITED TO THE IMPLIED WARRANTIES OFMERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.  EXCEPT FOR DAMAGES ARISING FROM DEATH OR BODILY INJURY TO THEEXTENT CAUSED DIRECTLY BY THE ACTS OR OMISSIONS OF SELLER, SELLER SHALL NOT BELIABLE TO BUYER OR ITS AFFILIATES FOR ANY DAMAGES IN CONNECTION WITH THE SALEOF SYSTEMS OR THE PERFORMANCE OF SERVICES UNDER THIS CONTRACT, WHETHER ARISINGIN CONTRACT, TORT, STRICT LIABILITY OR OTHERWISE UNDER ANY ONE STATEMENT WORKIN EXCESS OF THE PURCHASE PRICE FOR THE SYSTEMS AND SERVICES PROVIDED AND PAIDTO SELLER BY BUYER AND RETAINED BY SELLER UNDER THE SPECIFIC STATEMENT OF WORKGIVING RISE TO BUYER’S CLAIM.

**(f)           **TO THE MAXIMUM EXTENT PERMITTED UNDER APPLICABLELAW, SELLER’S ENTIRE LIABILITY TO BUYER FOR SERVICES REGARDLESS OF THE FORM OFACTION SHALL IN NO EVENT EXCEED TOTAL PURCHASE PRICE PAID TO SELLER BY BUYERAND RETAINED BY SELLER FOR THE SPECIFIC SERVICE GIVING RISE TO BUYER’S CLAIM.

**(g)          **NOTWITHSTANDING ANYTHING TO THE CONTRARYHEREIN, NO PARTY SHALL BE LIABLE FOR ANY INDIRECT, SPECIAL, INCIDENTAL,CONSEQUENTIAL OR EXEMPLARY DAMAGES, WHETHER FORESEEABLE OR NOT, THAT ARE IN ANYWAY RELATED TO THIS CONTRACT, THE BREACH THEREOF, THE USE OR INABILITY TO USETHE SYSTEMS, THE RESULTS GENERATED FROM THE USE OF THE SYSTEMS, THE QUALITY OFTHE SYSTEMS, ANY DEFECT IN THE SYSTEMS, FAILURE OF THE SYSTEMS TO PERFORM ASREPRESENTED OR EXPECTED, THE SERVICES, THE USE OR INABILITY TO USE RESULTS OFTHE SERVICES, ANY TRANSACTIONS RESULTING FROM THIS CONTRACT, LOSS OF GOODWILLOR PROFITS, LOST BUSINESS HOWEVER CHARACTERIZED AND/OR FROM ANY OTHER CAUSEWHATSOEVER.

**(h)          **THE PARTIES FURTHER AGREE THAT EACH ANDEVERY PROVISION OF THIS CONTRACT THAT PROVIDES FOR A LIMITATION OF LIABILITY,DISCLAIMER OF WARRANTIES OR EXCLUSION OF DAMAGES IS EXPRESSLY INTENDED TO BESEVERABLE AND INDEPENDENT OF ANY OTHER PROVISION SINCE THOSE PROVISIONSREPRESENT SEPARATE ELEMENTS OF RISK ALLOCATION BETWEEN THE PARTIES AND SHALL BESEPARATELY ENFORCED.

**9.             Termination**

**(a)           Insolvency.** Either party shall be entitled to terminate this Contract and anyoutstanding Statement of Work, and the parties’ duties and obligationshereunder and thereunder, on thirty (30) days prior written notice to the otherparty in the event the other party becomes insolvent or seeks protection,voluntarily or involuntarily, under applicable bankruptcy laws.

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**(b)           PaymentDefault.**  This Contract, and the parties’ duties andobligations hereunder, may be terminated by Seller upon Buyer’s failure to makepayment under any undisputed portion of any invoice on the due date for suchinvoice and Buyer’s failure to cure such delinquency within ten (10) daysfollowing receipt of written notice thereof from Seller to Buyer.  Seller may not withhold performance or termthis Contract if Buyer disputes any invoice or portion of any invoice in goodfaith and fails to pay such invoice while the dispute is pending.  Buyer may withhold payment in whole or partof any amount due or claimed by Seller to such extent as may be necessary toprotect Buyer or its Affiliates from loss on account of defective Systems orServices, third party claims arising from Seller’s performance under this Contract,failure of Seller to make payments promptly to employees, suppliers andcontractors, exceptions through audits or liabilities of Seller to Buyer underthis Contract.

**(c)           Terminationfor Cause.**  Either party may terminate this Contract atany time during Term, upon forty-five (45) days prior written notice to theother party, if the other party materially breaches any term or condition ofthis Contract (other than a payment default under Section 9(b)) and fails tocure such breach within the forty-five (45) day cure period.  As used in this Contract, a “materialbreach” shall mean a material misstatement or omission in any representation orwarranty of a party, or a breach or default in the performance of any agreement,covenant or obligations of a party hereto which, in any such case, deprives thenon-breaching party of a material right or benefits in any material respect.

**(d)           Terminationfor Patent Cause.**  If Seller’s U.S. Letters Patent Number5,396,074 is determined to be invalid or unenforceable by a finalnon-appealable judgment of  a court ofcompetent jurisdiction, then Buyer shall have the right, but not theobligation, to terminate this Contract upon thirty (30) days’ written notice toSeller.

**(e)           Effectof Termination.**  In the event of termination, both partiesshall be liable for all obligations that accrued prior to termination,including completion of deliveries under any open Statement of Work unless thenon-breaching party elects not to have the open Statement of Work completed,and for all obligations that survives the termination or expiration of thisContract.

**10.          Compliance With Laws; Approvals**

**(a)           Compliance/ManufacturingStandards.**  Seller and Buyer each shall be responsiblefor complying with all applicable legal and regulatory requirements of theUnited States and any other national, supranational (e.g., European Union),state or local regulatory agency, department, bureau, commission, council orother governmental entity regarding the manufacture and supply of Systems andperformance of Services under this Contract. All Systems supplied in connection with the Titan Scan Business shall bemanufactured in accordance with good manufacturing practice regulationspromulgated by the Food and Drug Administration from time to time to the extentsuch regulations apply to the Systems as used in the Titan Scan Business.

**(b)           GovernmentalInspections.**  Seller shall give Buyer or its affectedAffiliate prompt notice of any impending inspections by a governmental agencyof the facility used for or processes involved in the manufacture of theSystems, and shall provide Buyer and its Affiliate

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an opportunity to observesuch inspection.  Seller shall provideBuyer with copies of inspection reports, correspondence and other documentsrelating to government inspections. Each party shall promptly notify the other of new instructions,regulations or specifications of which it becomes aware which are relevant tothe manufacture of the Systems under this Contract and which are required bythe Food and Drug Administration or other U.S. federal agency, equivalentforeign regulatory agencies, or other applicable laws or governmentalregulations and shall confer with each other with respect to the best means tocomply with such requirements.  Sellershall be responsible for obtaining and maintaining all necessary planinspection standards and plant licenses, registrations or permits to enable themanufacture and sale of the Systems. Each party will promptly notify the other party of any comments,responses or notices that a party receives from any governmental authoritieswhich relate to the regulatory status of the Systems in any applications orfields other than the irradiation of food, flowers or animal hides.

**(c)           Buyer’sInspections.**  Buyer and its designees and Affiliates shallhave reasonable access to observe and inspect Seller’s manufacturing facilitiesand procedures, including manufacturing operations, at reasonable intervals andupon reasonable notice to Seller. Seller shall maintain proper and accurate records of all manufacturingsteps, processes, quality assurance and quality control procedures and willprovide reasonable access to Buyer from time to time at reasonable intervalsand upon Buyer’s reasonable request.

**11.          Confidentiality**

**(a)           Non-Disclosure.** The parties anticipate that both Buyer and Seller may learn Confidentialand Proprietary Information (as defined below) of the other as a consequence ofthe transactions contemplated by this Contract.  The parties therefore agree, on behalf of themselves, theiragents, employees, parents, subsidiaries, officers, directors, and all otherpersons acting on or for their behalf, (i) to keep all Confidential andProprietary Information confidential and not to disclose such Confidential andProprietary Information, either directly or indirectly, to any third party, and(ii) not to use any such Confidential and Proprietary Information for anypurpose other than performance of this Contract or as otherwise authorizedunder the License Agreement without the prior written consent of thenon-disclosing party.

**(b)           Exceptions.** The obligations in this Section 11 shall not apply to any: (i)information that either party knows about the other prior to the execution ofthis Contract except any information which is the subject of unexpiredconfidentiality obligations; (ii) information that is publicly known, orbecomes publicly known, through no breach by either party; (iii) informationthat is rightfully obtained by either party from any third party who has noduty of confidentiality under this Contract; (iv) information that isindependently developed by or for a receiving party completely apart from thedisclosures hereunder, (v) information that is released pursuant to a bindingcourt order or government regulation, provided that the receiving partydelivers a copy of such order or action to the other party and reasonablycooperates with the other party if it elects to contest such disclosure or seekan appropriate remedy such as a protective order or (vi) is otherwise necessaryto disclose in order to file or prosecute patent applications, prosecute ordefend litigation or comply with applicable law, including regulatory filings,or otherwise establish rights or enforce obligations under this Contract, butonly to the extent that any such disclosure is reasonably necessary.

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** **

**(c)           Precautions.** The parties mutually agree to take all reasonably necessary steps, andto prepare and execute all necessary documents, to protect and prohibit thedisclosure of Proprietary and Confidential Information under this Section 11using the higher of a reasonable standard of care or the care used by suchparty to protect its own confidential or proprietary information.  Each party will immediately notify the otherparty of any information that comes to its attention which might indicate thatthere has been a loss of confidentiality with respect to such other party’sConfidential and Proprietary Information.

**(d)           Remedies.** In the event of a breach or threatened breach by either party of suchparty’s confidentiality obligations in this Section 11, the parties acknowledgeand agree that it would be difficult to measure the damage to the non-breachingparty from such breach, that injury to such non-breaching party from suchbreach would be impossible to calculate and that money damages would thereforebe an inadequate remedy for such breach. Accordingly, the non-breaching party, in addition to any and all otherrights which may be available, shall have the right of injunctive relief andother appropriate equitable remedies to restrain any such breach or threatenedbreach.

**(e)           Returnof Property.**  Upon request, each party shall immediatelyreturn to the other party the originals and all copies of any Confidential andProprietary Infofll1ation of the other party.

**12.          Ownership**

The parties agreethat the ownership rights of Seller and Buyer with respect to the patents,patent applications, copyrights, trade secrets and other Intellectual PropertyRights to the Systems is set forth in the License Agreement. All modifications,enhancements, improvements to and derivative works of any Systems or componentsof any System or any other proprietary information, data, methods,methodologies, templates, software (including source code and object code),algorithms, libraries, design flows, processes, databases, tools, processes,interfaces, documentation, mask works, encoding techniques, electroniccomponents and other trade secrets and other Intellectual Property Rights, thatare developed, conceived or made by any employee or contractor to Seller in thecourse of performing its obligations under any Statement of Work that do notconstitute modifications, enhancement or improvements to the core System forapplication in the irradiation or pasteurization of food, flowers or animalhides (collectively, the ***“Works”***) shall be, to the maximum extent possible underapplicable law, deemed and meet the definition of “works made for hire” bySeller for Buyer under U.S. copyright law, and Buyer shall be deemed theexclusive author and owner of all Works and all Intellectual Property Rightstherein.  If any Work does not meet thedefinition of “work made for hire,” Seller agrees to irrevocably assign, andhereby does irrevocable assign and transfer, to Buyer all of its IntellectualProperty Rights therein, or if such assignment is not allowed, hereby grants toBuyer and its Affiliates a worldwide, exclusive, irrevocable, perpetualroyalty-free, fully paid license, with right to sublicense through multipletiers of sublicenses, to modify or use the Works for any and all purposes otherthan the irradiation or pasteurization of food, flowers or animal hides.  All worldwide rights, title and interest inany and all trade secrets and know-how discovered or developed by any employeeor consultant of Seller in the course of performing its obligations under aStatement of Work, excluding trade secrets relating to irradiation or pasteurizationof food, flowers or animal hides, shall be held and owned exclusively by Buyer

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(the ***“Trade Secrets”***), and Seller herebyirrevocably assigns and transfers the Trade Secrets to Buyer.  To the extent that any provision regardingIntellectual Property Right to the Systems delivered under this Contract iscontrary in the License Agreement, the provision of the License Agreement shallcontrol.

**13.          Remedies**

The remedies of theparties contained in this Contract are cumulative with one another and with anyother remedies which the parties may have at law, in equity, under anyContracts of any type or otherwise, and the exercise or failure to exercise anyremedy shall not preclude the exercise of that remedy at another time or of anyother remedy at any time.  No waiver ofa breach of any provision of this Contract shall constitute a waiver of anyother breach or of such provision.  Theinvalidity in whole or in part of any condition of this Contract shall notaffect the validity of other conditions.

**14.          Insurance**

Without limiting any ofthe other obligations or liabilities of Seller, Seller shall, at its ownexpense, secure and maintain in effect during the Term, and for a period offour years after acceptance of the final System delivered under a Statement ofWork, on an “occurrence” and not a “claims made” basis, insurance coverages asdescribed herein, in amounts not less than the minimum limits specified, toprotect Buyer from claims or liabilities in any way arising out of Seller’sperformance or non-performance under this Contract:  (1) workers compensation insurance and employers liabilityinsurance in accordance with statutory requirements and limits, (2) commercialgeneral liability insurance, including products liability coverage, contractualliability coverage and automobile liability coverage, with limits of not lessthan Two Million Dollars ($2,000,000) for each occurrence for bodily injury andproperty damage combined,  and (3)professional indemnity insurance coverage for claims in connection with itsengineering Services, with limits of coverage of at least Two Million Dollars($2,000,000).  Seller shall name Buyerand its Affiliates and their directors, officers and employees as additionalinsureds on the policies of insurance and endorsements to the policies in aform approved by Buyer and shall provide to Buyer certificates evidencing thiscoverage.  Seller agrees that theinsurance provided to Buyer under this Contract shall be primary to any insuranceof Buyer for all purposes, such Buyer insurance to be considered as excess ofand not contributing with Buyer’s policies. Seller shall be responsible solely for any deductible or self-insuredretention on such insurance.  All suchinsurance shall contain a severability of interest or cross liability clause,shall contain a waiver by the insurer of subrogation in favor of Buyer, andshall provide that the insurance may not be modified, cancelled or renewed forany reason, except with the insurer giving thirty (30) days’ prior writtennotice to Buyer.  Buyer understands andacknowledges that Seller’s cost for premiums for any insurance required to bemaintained under this Section 14 that exceeds the insurance coveragecustomarily obtained by similar businesses facing similar risks and thatexceeds the insurance requirements of other customers of Seller that are notaffiliated with Buyer shall be deemed Insurance Costs and shall be allocated tothe Cost of Services and Cost of Manufacturing in accordance with Sections 1(e)and 1(s).

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** **

**15.          Indemnity**

**(a)           Indemnity.** As between Buyer and its Affiliates, on the one hand, and Seller,on  the other hand, Seller shall besolely liable for and Seller shall indemnify, defend and hold Buyer, and itsAffiliates, or its or their directors, officers, employees, agents,representatives, successors and assigns (collectively ***“Buyer Indemnitees”***) harmless from andagainst any and all claims, actions, suits, proceedings, losses, liabilities,penalties, damages, costs or expenses, including attorneys’ fees anddisbursements, of any kind whatsoever resulting from (1) injuries to or deathof any and all individuals, including members of general public or anyemployee, agent or independent contractor of Buyer or its Affiliates, Seller orany customer of Seller arising out of or connected in any manner withperformance of any Services or any defect in the System(s) or Seller’s failureto warn Buyer, its Affiliates or its customers about risks relating to theSystem(s) or use of the System(s), whether or not the conduct of Seller or anysubcontractor was tortious and whether any other party contributed to theinjuries or death, (2) damages to, loss, and/or destruction of property, includingloss of use of any property, arising out of or connected in any manner withperformance of any Services or any defect in the System(s) or Seller’s failureto warn Buyer, its Affiliates or its customers about risks relating toSystem(s) or the use of the System(s), whether or not the conduct of Seller orany subcontractor was tortious and whether any other party contributed to theproperty damage, (3) third party claims of any kind, whether based uponnegligence, strict liability or otherwise, arising out of or connected in anymanner to Seller’s or any of its contractor’s acts or omissions in breach ofthis Contract or resulting from failure to comply with this Contract, or (4)actual or alleged infringement or misappropriation by Seller or any subcontractorof any intellectual property right in connection with the Systems or Servicesor violation of any third party license to use intellectual property rights inconnection with the Systems or Services.

**(b)           Defenseof Third Party Claims.**  If any claim is broughtagainst any Buyer Indemnitees, then Seller shall be entitled to participate in,and, unless in the opinion of counsel for Buyer a conflict of interest betweenBuyer and Seller may exist with respect to such claim or the defense thereof,assume the defense of, such claim, without any reservation of rights, withcounsel reasonably acceptable to Buyer. If Seller does not assume the defense of Buyer Indemnitees, without anyreservation of rights with respect to the indemnity obligation, or if a conflictprecludes Seller from assuming the defense, then Seller shall reimburse Buyeron a monthly basis for Buyer Indemnitees defense through separate counsel ofBuyer’s choice.  Even if Seller assumesthe defense of Buyer Indemnitees without any reservation of rights and withacceptable counsel, Buyer, at its sole option, may participate in the defense,at its own expense, with counsel of its own choice without relieving Seller ofits obligations hereunder.

**16.          AssignmentAnd Delegation**

Neither this Contract norany right, obligation or duty hereunder of either party, may be assigned to, orassumed or performed by, any third party, without the prior written consent ofthe non-assigning party; provided, however, that a change in the equityownership of Seller or Buyer shall be deemed not an assignment.  Any purported assignment or delegation madewithout compliance with the requirements of this Section 16 shall be whollyvoid and ineffective for all purposes.

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**17.          Integration**

This Contract, togetherwith each Statement of Work and Change Order issued hereunder (each of which isincorporated herein by reference), sets forth the entire agreement andunderstanding of the parties with respect to transactions contemplated herebyand thereby and supercedes any and all prior contracts, agreements andunderstandings of the parties relating to the subject matter hereof andthereof.  In the event of a conflictbetween this Contract and any Statement of Work or Change Order issued withrespect to any System hereunder, the terms of the Statement of Work, asmodified by any applicable Change Order will govern.  In the event of a conflict between any Statement of Work and arelated Change Order, the terms of the Change Order will govern.

**18.          Amendment/Waiver**

This Contract may beamended, modified, superceded or canceled, and any of the terms,representations, warranties, covenants and conditions herein may be waived,only by an instrument in writing executed by both parties or, in the case of awaiver, by the party waiving compliance.

**19.          ForceMajeure**

If either party is unableto carry out its obligations under this Contract because of Force Majeure (asdefined below), the parties agree to suspend performance until the event creatingthe Force Majeure is over.  The partywho is unable to perform because of a Force Majeure agrees to resumeperformance of its obligations under this Contract upon the termination of theForce Majeure.  Neither party shall beliable for any loss or damage by reason of such failure or delay in performancecaused by the Force Majeure.

**20.          Advertising And Publicity**

**(a)          **Neither Buyer nor Seller shall at anytime use the other party or its Affiliates’ names, trademarks or trade names inany advertising or publicity without the prior written consent of such party.

**(b)          **Neither Buyer nor Seller shall discloseor issue any press release related to any Statement of Work under this Contract(or the terms hereof), or the relationship between the parties, without theexpress prior written consent of the other party; provided, however, thatnothing herein shall be construed to prevent a party from complying with anystate and/or federal laws or regulations requiring such disclosure; provided,further, however that a party shall provide to the other party any such pressrelease or other disclosure at a reasonable time prior to its intendeddisclosure in order to enable such party to review all such press releases ordisclosures, and Buyer and Seller shall mutually agree on the wording of anypress release or disclosure.  Inaddition, in the event Seller deems it necessary to file this Contract as anexhibit to any publicly filed document in accordance with the regulations promulgatedby the Securities and Exchange Commission, Seller shall seek confidentialtreatment, within the guidelines of the Securities and Exchange Commission, forthe terms of this Contract. Seller shall provide Buyer the proposedconfidential treatment request submission, including the redacted version ofthe 

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Contract, at least five(5) business days prior to the proposed filing date and shall modify anysubmission as reasonably requested by Seller

**21.          Notices**

All notices, requests,demands and other communications which are required or permitted to be givenunder this Contract shall be in writing and shall be deemed to have been dulygiven (i) upon delivery if delivered personally, (ii) upon confirmation ofreceipt if sent by facsimile, (iii) upon delivery if sent by reputableovernight courier, or (iv) five (5) days after mailing by registered orcertified mail, return receipt requested, postage prepaid, in each caseaddressed as follows:

 

If to Buyer:                                                                                    The Titan Corporation

3033Science Park Road

SanDiego, California 92121

Attention:  General Counsel

Facsimile:(      )                           

 

If to Seller                                                                                          SureBeam Corporation

3033Science Park Road

SanDiego, California 92121

Attention:  Chief Financial Officer

Facsimile:  (       )                             

 

or to such other personor address as either party shall have specified by notice in writing to theother party hereto.

 

**22.          GoverningLaw**

This Contract shall beconstrued in accordance with, and governed in all respects by, the internallaws of the State of California (without giving effect to principles ofconflicts of laws).   Both partiesirrevocably submit to the exclusive jurisdiction of the state and federalcourts located in San Diego, California and both parties waive any right toobject to the jurisdiction or venue of the courts in San Diego, California forsuch purpose.

**23.          Severability**

The invalidity orunenforceability of any provision of this Contract shall not affect thevalidity or enforceability of any other provision contained herein.

**24.          NoSolicitation**

During the Term of thisContract and for a period of one (1) year after termination of this Contract,neither Buyer nor Seller shall not induce, solicit, assist, or have discussionsor any other communications with any employee of the other party or itsAffiliates to influence or cause that employee to terminate employment withsuch party, and will not facilitate, inducement,

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solicitation,discussion or any other communication by a third person of or with any employeeof the other party to influence or cause that employee to terminate employmentwith the other party.

**25.          Headings**

The headings used in thisContract are for convenience of reference only, shall not be deemed to be apart of this Contract and shall not be referred to in connection with theconstruction or interpretation of this Contract.

**26.          Construction**

In the interpretation andconstruction of this Contract, the parties acknowledge that the terms hereof reflectextensive negotiations between the parties and that this Contract shall not bedeemed, for the purpose of construction and interpretation, to have beendrafted by either party.

**27.          Counterparts**

This Contract may beexecuted in several counterparts, each of which shall constitute an originaland all of which, when taken together, shall constitute one agreement.  Delivery of an executed signature page tothis Contract by facsimile transmission shall be as effective as delivery of amanually signed counterpart of this Contract.

**28.          Survival**

The provisions ofSections 3(e), 7, 8, 9(e), 11, 12, 13, 14, 15, 22, 23, 24, 28 and 29 shallsurvive termination of this Contract.

**29.          DisputeResolution**

The parties shall seek toresolve any dispute arising under this Contract in accordance with theprocedure set forth in this Section 29. Prior to undertaking any legal action to enforce any provision of thisContract, the party contemplating such enforcement shall provide written noticeto the other party of the contemplated legal action and shall briefly describethe nature of the dispute between the parties relating to such action.   If after negotiating in good faith theparties are unable to resolve the dispute within twenty (20) days of the otherparty’s receipt of such written notice, then the dispute will be referred tothe chief executive officer of Seller and Buyer respectively, or theirdesignees, for good faith resolution for a period of fifteen (15) days.  If the parties fail to resolve the disputewithin such fifteen-day period, either party may pursue any remedies availableto under this Contract.

**30.          Authority**

The parties executingthis Contract on behalf of Buyer and Seller represent and warrant that theyhave the corporate and other authority to enter into this Contract and to bindtheir respective companies to all the terms and conditions of this Contract.

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**31.          Further Assurances**

Both parties agree toexecute such additional documents and perform such acts as are reasonablynecessary to effectuate the intent of this Contract.

**32.          Subcontractors**

Seller shall reasonablycooperate with Buyer in connection with the formulation and execution of anysubcontracting plan that Buyer is required to submit to any governmental agencyunder a contract between Buyer and such governmental agency for the Systems orServices so as to cause the same to comply with small, minority, andwomen-owned businesses subcontracting requirements, including withoutlimitation, using suppliers and subcontractors included within any relevantsubcontracting plan in connection with the performance of the relevantStatement of Work.

**33.          ConvictLabor**

In connection with thework under this Contract, Seller agrees not to employ any person undergoingsentence of imprisonment, except as provided by Public Law 89-176, September10, 1965 (18 U.S.C. 4082(c)(2)) and Executive Order 11755, December 29, 1973.

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**34.          EqualOpportunity**

If this Contract or anyStatement of Work is subject to Executive Order 11246 of September 24, 1965,and relevant orders of the Secretary of Labor, Section 503 of theRehabilitation Act of 1973, as amended and relevant orders of the Secretary ofLabor, or the Vietnam Era Veterans’ Readjustment Act of 1974 or any otherapplicable laws regarding the provision of equal employment opportunities, thenSeller shall comply with the equal employment opportunity clauses andapplicable orders, including those set out at 41 CFR 60-1.4 and 41 CFR 60-250.4and 60-741.4, which clauses are incorporated herein by reference with the sameforce and effect if stated in full text.

IN WITNESSWHEREOF, the parties hereto have executed this Contract as of the EffectiveDate.

 
| THE TITAN CORPORATION |                    |
|-----------------------|-------------------------|
|                  |                    |
| By:                   | /s/ MARK W. SOPP        |   |
| Name:                 | Mark W. Sopp            |
| Its:                  | Chief Financial Officer |
|                  |                    |
| SUREBEAM CORPORATION  |                    |
|                  |                    |
| By:                   | /s/ DAVID A. RANE       |   |
| Name:                 | David A. Rane           |
| Its:                  | Chief Financial Officer |
|                       |                         |  |  |

 

 

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**EXHIBIT A**

**DESCRIPTION OF SYSTEMS**

**(As modified by theapplicable Statement of Work)**

 

1.                                 Electron Bean Energy Source

•                                          Linear accelerator(s) Model SB 10/18 (generates 18 kWof electron beam power at 10 MeV energy or SB 5/15 (generates 15 kW of electronbeam power at 5 MeV energy), including modulator, klystron, radio frequencytransmission, beam centerline, scan horns and vacuum system

•                                            Horizontal or Vertical acceleratorconfiguration.

•                                            X-Ray converter (if applicable) —conversion efficiency is dependent on specific factory test results

•                                            Beam stop

•                                            real-time control system, with redundantmonitors for key process parameters

•                                            secondary closed loop water conditioningand cooling system.

•                                            Performance specifications: E50(average energy) = 10.0 ± 0.3 MeV, power = set-point ± 5%,variance in scan uniformity < ±5%, reliability 3 95%,selectable scan heights = 3, overscan < 1” top and bottom. All energy andpower measurements shall be performed to Buyer’s standard testing procedures(F###-##-####.A).

 

 

2.                                 Material Handling System — a materialhandling system for containing, positioning and moving the product to beprocessed through the process

•                                            transportation conveyor — roller , chain,or power and free conveyor

•                                            process conveyor—independent servo drivenprocess conveyor(s) precisely control the speed of the product through theelectron beam.

•                                            other mechanisms required to processmaterial through the system such as closing conveyors, rotate mechanisms, boxflipping, etc.

•                                            Carriers or pallets

•               control system — monitor andcontrol the flow of product through the system, including actions that resultin product movements.

•                                            Performance specifications: design load< 500 lbs for power and free conveyor or < 50 lbs for conveyor, processconveyor speed range 1.00 to 10.00 fpm (base), close packing < 3”, processinterrupt = positive.

 

 

3.                                 SureTrack Control System — a real-timeinformation and control system to provide data management systems, operatingfunctions, logical error detection and overall error recovering functions forthe entire system, including:

•                                            work station computer, mirrored harddrives (2RAID drives), color graphics, monitor, color printer and interface toAllen Bradley PLC.

•                                            real-time PLC control system formonitoring, tracking and controlling the irradiation process.

 

 

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•                                            real-time information system to meetapplicable regulatory requirements and provide the following functionality:

-graphical userinterface;

-system start-upand shutdown;

-creation, auditand scheduling of processing protocols;

-lot control;

-real-time monitorand information display;

-process integritychecks;

-error detectionand recovery;

-processingreports, data management and information archiving;

-data logging andprocess variable trending;

-alarm monitoring;and

-password andsecurity protection

 

•               redundant sensors for all keyprocess monitors

•               software validation per SureBeamSoftware Development Procedures.

 

4.           Dosimetry System — a redundant dosimetry system toindependently measure doses of electron beams delivered to products.  The system shall conform to applicableAmerican National Standards Institute standards.  The following equipment shall be included:

 

•             Genesys spectrophotometers with accompanying softwareintegrated to a PC for data processing;

•               5000 B2 radiochromic dosimetersthat cover a range of doses from 1.0 kGy to 100 kGy

•               certified RISO Aluminum EnergyWedges or other electron beam measurement equipment

•                                            PC and associated software and laserprinter for running the dosimetry system.

•                                            equipment calibration and procedures.

 

5.                                 Safety system — a safety system thatmeets the requirements for electron mean system protection as specified byOSHA, IAEA Safety Series 107, NCRP Report 51 and applicable state regulatoryrequirements, including the following capabilities:

 

-intrusiondetection for unauthorized access to the system

-emergency stopsand pull cords

-fire/smokedetection.

-system start-up& shutdown.

-key lockouts.

-radiationmonitors for out-of-limits conditions.

-status display.

-start-up alarmsand horns.

-start-up timer.

 

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-status alarms andbeacons.

-ozone exhaustflow monitor.

-safety signs andmarkings (Radiation Hazard, Access Prohibited, High Voltage etc.).

-automaticshut-down for out-of-limits conditions.

-sequencedstart-up.

 

6.                                 Shielding — a radiation protection shield(concrete or steel) designed to protect operators from ionizing energy and meetOSHA and state regulatory requirements. The shield is designed to provideprotection from ionizing radiation generated from the interaction of the beamand material. The design requirements for the system require that radiationmeasurementslevels in the load and unload areas be < 20 mSv per 2000hoursyear,; and in areas such as the Equipment Room the levels can be < 20mSv per 400 hours. Access to the beam area is strictly prohibited because theradiation level exceeds 3 mSv per hour. The shield can be designed as anexternal building.

 

 

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**EXHIBITB**

** **

**INTEGRATIONSERVICES AND SERVICE LEVELS**

 

 

Site Construction  [add descriptions of the services to bedelivered in each area]

 

 

 

Equipment installation —Seller shall complete the installation of equipment as defined in the Statementof Work.

 

 

Hookup of equipment toutilities furnished by Buyer or its customers.

 

 

System integration andperformance testing — the following tasks shall be performed during systemintegration:

-                    Installation and operation of theequipment as a total system

-                    Interfacing major sub-systems (controls,accelerator, material handling, safety, and utilities)

-                    Testing of all normal and errorconditions

-                    Set all operating parameters and high /low limits

-                    Verify operating performance (energy,power, speeds, etc.)

 

 

Validation of System toStatement of Work requirements

 

-                    Installation qualification shall beperformed as defined in ISO-11137

-                    Irradiator dose mapping shall beperformed as defined in ISO-11137

-                    Certification

-                    Validation activities shall be performedto ISO-11137, FDA guidelines, and Seller’s Software Development Procedure,latest version

 

System acceptance test& installation qualification — as part of the system validation andinstallation qualification, the following system acceptance test will beperformed:

-                    Demonstration of key system functionality(start-up, shutdown, product input, irradiation processing, and outputprocessing). Criteria for success = meet requirements for major functionality

-                    Demonstration of the safety system toSeller test procedures. Criteria for success = meet requirements for all safetytest procedures

-                    Perform radiation survey. Criteria forsuccess = meet OSHA and State protection levels

-                    Completion of the IQ and OQ tests

 

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-                    Demonstration of the system reliability.Criteria for success = 95% uptime under normal operating conditions (no inducederrors) for a period of 8 hours.

-                    Minor items not effecting the systemintegrity, dose, or system safey may be added to a punchlist for subsequentresolution.

 

**Any otherservices set forth on the applicable Statement of Work.**

** **

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**EXHIBITC**

** **

**MAINTENANCEAND REPAIR SERVICES AND SERVICE LEVELS**

**1)****                           **The following maintenance support may beprovided as specified in the Statement of Work:

•                  Full-time maintenance personnel will be provided withprimary responsibility for maintaining the System. These personnel will bescheduled to provide coverage during the normal hours of operation.

•                  Normal PM and cleaning will be performed duringnon-production hours.

•                  A computerized maintenance system (MPII) will be usedto track and schedule the maintenance activities. This system will be loadedwith maintenance instructions and schedules, and maintained to provide a recordof maintenance activities for regulatory reviews.

•                  Sufficient spare parts and consumables will be stockedat both the site and Seller’s maintenance depot to ensure that maintenancepersonnel have access to replacement parts in a time frame to maintain systemavailability > 95%. The cost of all spare parts consumed is included.

•                  All special tools needed to maintain the System shallbe provided by Seller. To include vacuum roughing pump, storage oscilloscopes,etc.

•                  Equipment calibrations traceable to national standardsshall be performed on all equipment used to measure or set the operatingparameters.

•                  On a periodic basis, Seller will perform an audit ofthe System to monitor the status of the following items:

-                    Process integrity;

-                    Safety system functionality;

-                    Operating parameters;

-                    Radiation protection;

-                    Ozone ventilation.

•                  On-line link connecting the site control system toSeller’s support personnel to provide remote diagnostic capability will beprovided.

 

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